a.
Book value:
Book value of the asset is found out after deducting
The fair value of the asset:
The fair value of the asset is the amount at which two parties may enter into an agreement with open hand.
Cash flow:
Cash flow is the receipt or payment by the organization. It may be related to the current period or any other period. It shows the cash position of the organization.
Cash flow from operating activities:
Cash flow from the operating activities shows the receipt and payment regarding the business activity only.
Cash flow from investing activities:
Cash flow from the investing activities shows the receipt and payment regarding the investment activity only.
Cash flow from financing activities:
Cash flow from the financing activities shows the receipt and payment regarding the financing activity only.
Cash flow statement:
Cash flow statement is a statement that reports the
The effect of given transaction on the cash flow statement of the consolidated firm in the period of the purchase if Company P pays $640,000 cash to purchase the stock.
Cash flow from investing activities:
Cash flow from the investing activities shows the receipt and payment regarding the investment activity only.
To explain:
The effect of given transaction on the cash flow statement of the consolidated firm in the period of the purchase if Company P pays $400,000 cash and signs a 5-year note for $240,000.
c.
Cash flow from investing activities:
Cash flow from the investing activities shows the receipt and payment regarding the investment activity only.
The effect of given transaction on the cash flow statement of the consolidated firm in the period of the purchase if Company P exchanges only common stock with the shareholders of Company S.
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Chapter 6 Solutions
Advanced Accounting
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